On January 1, 2007, Bleeker Co. issued eight-year bonds with a face value of $1,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are:
Present value of 1 for 8 periods at 6%.. .... .627
Present value of 1 for 8 periods at 8%.. .... .540
Present value of 1 for 16 periods at 3%.. .... .623
Present value of 1 for 16 periods at 4%.. .... .534
Present value of annuity for 8 periods at 6%.. .. 6.210
Present value of annuity for 8 periods at 8%.. .. 5.747
Present value of annuity for 16 periods at 3%.. 12.561
Present value of annuity for 16 periods at 4%.. 11.652
The present value of the principal is:
a) $534,000.
b) $540,000.
c) $623,000.
d) $627,000.